Secondary Energy (Electricity) Outlook of Turkey

71 that year. Although the imports of energy and its share decreased to 55.9 billion dollars and 22.21 % respectively in 2013, energy import constituted more than half of the trade deficit of the country. Turkey paid 385.2 billion dollars to the energy import in last ten years and this number equals nearly half of the gross domestic product of the country.

Today, Turkey’s energy situation has reached to a critical stage not only in terms of price but also for the energy supply security because of its huge dependency to the foreign energy resources. Since the geography of Turkey is extremely sensitive, dependence on foreign energy should be reduced as soon as possible. Due to the fact that energy is the main input of the development and economic growth, it is very important to obtain energy securely and uninterruptedly. To sustain energy security and decrease the negative effects of energy import on economy, energy investment on domestic resources (both renewable and fossil based) should be accelerated.

72 Table 19: Electric Energy Outlook of Turkey’s (GWh)

Year Production Import Export Consumption Production Increase Rate (%)

Consumption Increase Rate %)

2003 140.581 1.158 588 141.151 8.6 6.5

2004 150.698 464 1.144 150.018 7.2 6.3

2005 161.956 636 1.798 160.794 7.5 7.2

2006 176.300 573 2.236 174.637 8.9 8.6

2007 191.558 864 2.422 190.000 8.7 8.8

2008 198.418 789 1.122 198.085 3.6 4.3

2009 194.813 812 1.546 194.079 -1.8 2.0

2010 211.208 1.144 1.948 210.434 8.4 8.4

2011 229.395 4.556 3.645 230.306 8.6 9.4

2012 239.497 5.826 2.954 242.370 4.4 5.2

2013 239.293 7.425 1.235 245.484 -0.08 1.2

Resource: Energy Report, MENR, 2014

In table 19, the electricity production of Turkey on the basis of source is shown. According to the Ministry of Energy and Natural Resources’ data, except for 2008 and 2013, electricity production increased steadily in last decade. While the electricity production from thermal plants and hydroelectric plants rose 63 % and 67 % respectively, the electricity generation from wind and geothermal power increased 59-fold in this period. In other words, while the share of wind and geothermal power were only 0.001 in total electricity production in 2003, they reached to 3.7 % in 2013 and 4 % as of September 2014. The renewable energy regulation and incentive about the electricity production from renewables plays a great role in this increase.

Turkey produces nearly 71.6 % its electricity from thermal resources, 24.7 % from hydraulic, 3.7 % wind, geothermal and other renewables. As of September of 2014, the share of thermic plants rose to 78.8 %. The share of hydraulic fell into the 17.2 % with the effects of drought. The share of other renewables increased slightly and reached to 4 % in the total electricity production of our country. In the 2003-2014 periods, composition of the sources used in electricity production has been changing between the 69.3 % and 82.7% for thermic plant, 16.8 % and 30.6 % for hydraulic, 0.1 % and 4 % for wind, geothermal and other renewables (MENR, 2014).

73 Table 20: Turkey’s Electricity Generation on the Basis Source

Year Thermic Hydraulic Geothermal and Wind

Total Increase rate (%)

2003 105.101 35.330 150 140.581 8.6

2004 104.464 46.084 151 150.698 7.2

2005 122.242 39.562 153 161.956 7.5

2006 131.835 44.244 221 176.300 8.9

2007 155.196 35.851 511 191.558 8.7

2008 164.139 33.270 1.009 198.418 3.6

2009 156.923 35.958 1.931 194.813 -1.8

2010 155.828 51.796 3.585 211.208 8.4

2011 171.638 52.339 5.418 229.395 8.6

2012 174.872 57.865 6.760 239.497 4.4

2013 171.256 59.246 8.792 239.293 -0.08

Ratio of 2013 71.6 % 24.7 % 3.7 % 100 %

2014 (September) 148.947 32.581 7.563 189.091 -

Ratio of 2014/9 78.8 % 17.2 % 4 %

Resource: Energy Report, MENR, 2014

When we look at the distribution of Turkey's electricity production in primary energy sources, we see that nearly 70 % of the electricity is produced from natural gas and coal.

The share of coal and natural gas was 25.70 % and 43.81 % respectively in 2013. Because of the effects of drought, the share of the coal and natural gas increased to 78.8 % and the largest share belongs to natural gas with the 47.84 % ratio at the end of the September in 2014. This situation shows that the foreign dependency of electricity production is more than 50 % and this can directly affect the security of energy supply. Since 98 % of natural gas is imported and more than half of this import is made from only one country, Russia, sustainability of the electricity production is very risky for Turkey. Both foreign dependency and distribution of this dependency to the country make Turkey’s electricity policy vulnerable against the foreign effects.

74 Table 21: Distribution of the Electricity Generation of Turkey in Primary Energy Resources

2012 2013 End of September 2014

Primary Energy Resources

Electricity Generation

Billion kWh

Share in Total Generation

(%)

Electricity Generation

Billion kWh

Share in Total Generation

(%)

Electricity Generation

Billion kWh

Share in Total Generation

(%)

Coal 68.013 28.40 61.476 25.70 54.958 29.06

Liquid Fuels

1.639 0.70 3.890 1.63 2.551 1.35

Natural Gas 104.499 43.60 104.835 43.81 90.453 47.84

Renewables waste

721 0.30 1.055 0.44 984 0.52

Total Thermic

174.872 73 171.256 71.57 148.947 78.77

Total hydraulic

57.865 24.20 59.246 24.76 32.581 17.23

Wind 5.861 2.40 7.518 3.14 5.989 3.17

Geothermal 899 0.40 1.274 0.53 1.575 0.83

Total non-thermic

64.625 27 68.038 28.43 40.145 21.23

Total 239.497 100 239.293 100 189.091 100

Resource: Energy Report, MENR, 2014

The installed electricity capacity of Turkey was 35.587 MW in 2003. It increased nearly 92

% in last 12 years and reached to 68.230 MW as of September 2014. The average growth rate is realized as 7.67 %. As of September, distribution of the installed power according to the primary energy resources are 20.6 % coal, 31.1 % natural gas, 8.3 % other thermic sources, 34.4 % hydraulic, 5.1 % wind, 0.5 % geothermal and 0.03 % solar power. Except for renewables, the distribution of all resources stayed stable between the 2003-2014 periods. However, while the installed capacity of renewables, geothermal, wind and solar, was only 0.1 % in 2003, it rose more than 50-fold and reached to 5.6 as of September 2014. In 2014, Turkey added the first solar power plant to its national grid by bidding 600 MW solar licensing.

The share of private sector in the total electricity production and installed capacity increased to 71 % and 65 % respectively in 2014. While some of the share increase comes from the direct investment of the private sector, the other part comes from the privatization of the public institutions. In order to maintain competition in electricity market and to accelerate the investment on electricity generation, the government started the privatization program in electricity plants.

75 Table 22: Installed Electricity Capacity of Turkey

Year Thermic Hydro Wind

Geo-thermal

Solar Total ^Growth Rate

(%) Coal Natural

Gas

Others

2003 8.239 10.053 4.683 12.579 18,9 15 - 35.587 11.7

2004 8.296 11.349 4.500 12.645 18,9 15 - 36.824 3.5

2005 9.117 12.275 4.487 12.906 20,1 15 - 38.820 5.4

2006 10.197 12.641 4.520 13.063 59 23 - 40.502 4.3

2007 10.097 12.853 4.322 13.395 146,3 23 - 40.836 0.8

2008 10.095 13.428 4.072 13.829 363,65 29,8 - 41.817 2.4

2009 10.501 14.555 4.284 14.553 791.6 77.2 - 44.761 7.0

2010 11.891 16.112 4.276 15.831 1.320 94,2 - 49.524 10.6

2011 12.491 16.003 5.438 17.137 1.729 114,2 - 52.911 6.8

2012 12.530 17.162 5.337 19.620 2.261 162,2 - 57.072 7.9

2013 12.428 20.254 5.965 22.289 2.760 311 - 64.007 12.2

2014 (Sept.)

14.034 21.189 5.689 23.455 3.484 358,4 20,3 68.230 6,6 Ratio 20,6% 31,1% 8,3% 34,4% 5.1% 0.5% ^{0.03 %} 100%

Resource: MENR, 2014

3.3. ENERGY RESOURCES OF TURKEY